How much do you need to save for retirement?

It’s a big question and one of the most frequently asked about retirement. There is no doubt that planning for retirement can be challenging. What do you need to save before retiring? How much should you be saving each month? When should you start putting money away? And that’s before you begin to think about making those savings last.

At its heart, retirement saving is about numbers, and we’ve created some simple rules to help you think about saving for retirement in a way that is easy to understand.

Think the power of seven

Our research* shows that households** in the UK who save seven times their annual household income by age 68 should be able to retire without any material reduction in their standard of living. And these are the rules of thumb to help you get there.

The savings rule of thumb says you should save at least one times your annual household income by the time you reach 30, two times by 40, four times by 50, six times by 60 leading to seven times by the time you retire, assuming you retire at age 68.

Savings milestones and saving goal infographic

Please note that the rules of thumb and figures quoted are generic assumptions and estimations; they are not personalised and are not a replacement for professional advice. They may not represent what will actually happen in the future, because no one knows that. You can, however, use the rules of thumb as high-level guidelines to retirement planning and saving.

If you’re behind your savings goals, one way to catch up is by making small increases to your savings now. Increasing your pension saving by just one percent can make a big difference to your total savings after 20 or 30 years. No matter what your age, focus on the goals ahead. Don’t be discouraged if you aren’t on track. The key is to understand what you are aiming for and take action if you can, and the earlier the better.

Our easy-to-use retirement planning calculators can help with various aspects of your retirement, from planning your goals and savings to working out your withdrawals.

*Fidelity International’s retirement savings guidelines white paper, November 2018.
**Typically two working adults and two state pensions.

Important information

The value of investments can go down as well as up, so you may get back less than you invest. Withdrawals from a pension product will not normally be possible until you reach age 55. This information is not a personal recommendation for any particular investment, product, service or course of action. If you need additional help, please speak to an authorised financial adviser. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.

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